Interdisciplinary aspect of the theory of market

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P L ISSN 1233-5835

Ludw ik S k ib a*, R obert M ajkut**

INTERDISCIPLINARY ASPECT OF THE THEORY

OF MARKET

The field called in this paper “the theory of market” probably best shows the needs and possibilities of interdisciplinary co-operation of social sciences. This co-operation can contribute to metamorphosing theory of growth into theory of development, considering quality changes in economic system. A good example for a hitherto existing co-operation, but also of many opportunities not yet exploited in this matter, are investigations concerning consumer behaviour. In the paper there is also attention focused on intellectual inspirations o f interdisciplinary research, contained in works of such scientists, as A. Smith, T. Veblen, M. Weber, J. M. Keynes, A. Maslow, T. Parsons. N. J. Smelser and some others.

1. INTRODUCTION

T he weakness of economics as a science, perceived both by economists and representatives of other sciences, is the lack of theory of developm ent understood in a broader sense than theory of growth. It seems that this lack could be completed only by interdisciplinary research integrating econom ics’ contribution with sociology and other social sciences. Science, as one o f the highest form s of social consciousness grown on the ground o f such earlier form s as art, religion and philosophy, is connected with other kinds of creative ways o f investigating truth. Similarly to other systems o f creative human activities, econom ic system does not exist separately. It is strictly associated with broadly understood social and cultural structures, or else, in individual dimension, with psychic construction of the people engaged in the system. Taking into consideration the above statem ent and willing to analyse profoundly econom ical phenom ena, to develop creatively economics, we have to appreciate and em ploy the contribution and m ethods of other sciences. Special position in so understood system, and sim ultaneously interdisciplinary approach, is taken by social sciences: sociology and psychology. The requirem ent o f interdisciplinary approach in considering econom ic matters in not anything new, however, such an approach brings about different dangers. Authors preferring it may expose them selves to the accusation o f ignorance in respect to m ethods or resolutions o f

* W roclaw University of Economics, Department of Macroeconomics. ** University o f Wroclaw, Departm ent of Sociology.

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26 L. SKIBA, R. MAJKUT

the sciences that are not their speciality. However, erudition, knowledge of various m ethods and sense in their selection makes an attractive challenge.

The present paper is an attem pt of interdisciplinary study of social and psychological factors of consum er behaviour and the role of individual consum ption in macroeconomic dim ension.

2. ECONOMICS VERSUS SOCIAL PSYCHOLOGY AND SOCIOLOGY

There exist such spheres o f reality that actually cannot be examined in any other approach than an interdisciplinary one. On the field of economics this approach has to be employed in the analysis of social politics and managing matters. But first of all it concerns the problems of econom ical development, in short - integration of growth theory with these factors of social psychology and sociology, which influence quality changes of economical system in long terms.

W hich socio-psychological factors are we concerned about? So, we have to focus m ainly on social structure, institutions understood as obeyed norms and, finally, habits and lifestyle, mainly referring to definite w ays of satisfying needs on the m arket of goods and services. These factors, as social stimuli of growth, were noticed previously by T. Parsons and J. N. Sm elser (1957), W. A. Lewis (1956), B. F. Hoselitz (1963), K. B. Boulding (1970), and before that by M. W eber (1920), and A. Smith (1962). In theoretical system of J. M. Keynes (1956) one o f the most im portant categories is psychological tendency to consum ption, and similarly, psychological tendency to econom izing. Here we propose to look at consum ption in an interdisciplinary way, taking into consideration the role of individual consumption taking place on the level of a household, in macroeconomic system . J. M. Keynes in General Theory> o f Employm ent, Interest and M oney, analysing the role o f consum ption in keeping

econom ical system in balance, posed the question - if the individual consum er behaviour influences the national econom y, or if it is the o ther way round - it is the econom ical system, that conditions consumer behaviour? Keynes’ category of psychological, extreme tendency to consumption is a foundation for the hypothesis o f absolute income. Form ulating this hypothesis was preceded by a broad analysis of consumer’s decisions concerning econom izing and factors limiting these decisions. In later discussions over K eynes’ system it is difficult to find his whole broad reasoning o f consumer’s psychology, who is directed by eight main motivations to economize. These are: carefulness, anticipation, calculation, bettering the standard of future consumption, independence, initiative, ambitions and meanness. In the course of his argumentation J. M. Keynes analysed the behaviour of the people who gained higher and higher incomes. On the basis of

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this analysis he formulated the two basic notions: average and extreme tendency to consumption.

T he rate o f econom izing g ro w s together with the in com e grow th. B eing aw are o f the tendency to eco n o m ize and the size o f the profit, we m ay d eterm in e the level of consum ption, assum ing that co n su m p tio n is not saved earnin gs. C onsum ption is a g ro w in g function of inco m e, but along with the incom e grow th, psychological tendency to co n su m p tio n , both extrem e and average, lessens.

J. M. K eynes’ theory is a good example of interdisciplinary approach to econom ical problems. C onsum ption in this theory is an integral part of the huge theorem basing on the idea of providing balance o f econom ical system o f a given society. Besides, the author was a man of really renaissance nature. A philosopher, economist, m athem atician, dem onstrating in a perfect way the possibility of passing from investigating a single m an, his m otivations to econom izing, to researching the effects of his decision for the whole econom ical system . A s to the broadness o f interests and thought horizons, he resembled the great Scotchm an, Adam Smith (1962).

T he influence of individual consum ption on econom ical developm ent is the initial assum ption o f the research of “consumer behaviour” . This term used to be applied to name this sphere of realizing needs, which consists in making choices and purchasing material and non-m aterial goods. C onsum er behaviour is in its character of interdisciplinary kind (Kanuk, Shiffm an 1987, p. 15). They are shaped under the influence o f working economic factors (owned financial resources), social factors (belonging to definite groups, place in a structure constituting the society), and also psychological factors (aspirations, needs). O f course, w e must not forget about biological, anthropological, and other factors that also influence consum er choices. Consumer behaviour belong to the lifestyle of a given person. They are conditioned m ore strongly by so c io - psychological factors, than by econom ic factors.

T he notion of needs is connected with the problem o f consum er behaviour. To explain it, we have to transcend the strictly econ om ic area, and use the co ntributio n o f other sciences. According to contem po rary psychology needs result from the structure of personality, and th e ir source is rooted in “o ccu rrin g in the human psyche some bothersom e ten sion s, whose reduction p roduces satisfaction - every hum an and animal o rg an ism strives to gaining and preventing some optim al state of physo-chem ical balance with environm ent. Disturbing this balance causes u np leasan t tension that is reduced by satisfy ing given need” (O buchow ski 1968, p. 57). In sociological approach “H um an needs, of all kinds, are a part of social life, and they result on the ground o f the culture characterizing given life. A hum an being acquires them

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in course o f socialization, as a m em ber of society” (Ż ygulski 1977, p. 308). Among the constituent elem ents o f needs we may enum erate: “ 1) the basic com ponent - physiological state; 2) psychological co m po nen t - which causes that a given basic need is perceived diversely on d ifferen t levels o f culture, know ledge, religion etc.; 3) socio-cultural framing, in w hich we may include e.g. cultural norm s, customs, fashion etc.; 4) the elem ent o f the ostensibility of need - expressing itself in a specific emotional attitu d e to the framing, occurring as the result of the fram ing becoming self-sufficient, e.g. persistent keeping up with fashion, w illing to distinguish o neself by possessing etc.” (Szczepański 1977. pp 16-17).

Needs are often subjects to the attempts of detailed concretization and system atization. One of the m ost popular is the concept o f A. H. Maslow (1990). T here arises the question about the sense of such classifications. In the light of the aim of our elaboration they do not consist any greater cognitive value, though they could serve as exemplification of “ interdisciplinary nature” of consum er behaviour.

3. SOCIAL STRUCTURE AS INDICATOR OF CONSUMER BEHAVIOUR

The essence of needs is thus the fundamental assum ption o f interdisciplinary approach to the problems of the consum ption sphere. The follow ing question is the problem o f social structure’s influence on people’s behaviour. Undoubtedly, it affects m arket behaviour of a hum an being as a consum er, and simultaneously as a disposer o f production factors (land, work, and capital). Feudal system or the structure o f a totalitarian society limits the scope o f consum er choices and the liberty to dispose production factors, whereas the structure of a democratic, free-m arket society is favourable for quantitative and qualitative development o f market behaviour. A. Smith was the one, who focused on the influence of the social structure on individuals’ behaviour, and he did it in the light of moral philosophy. He considered, am ong others, how it happened, that natural, egoistic m otivations of conduct got changed as the consequence of interactions, to finally lead to an unexpected effect, which was social harm ony (Skiba 1996).

The V e b le n ’s paradox and the effect of craze are connected with the influence o f social structure on individuals’ behaviour. P eople have tendency to buy expensive, exclusive goods in order to gain prestige in the eyes of others. Such goods prove their purchase possibilities. Buying them , people want to com m unicate others, that in fact they belong to other groups, i.e. these enjoying more prestige, are more respected, and belonging to them is treated as an ennoblem ent and privilege (V eblen 1971). The term “social prestige”,

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occupying central position in V eblen’s paradox has to be explained by the prism of so cio lo gy’s contribution, m ainly by assignations concerning social structure and the consequence of occupying such and not other position on the scale o f privileges and handicaps (W ejland 1983). The role o f the m odel-establishing groups, i.e. the groups of reference for people b ehaviour was examined and explained by R. Merton (1982) - the apprentice of T. P arson, and he did it from the perspective of functionalism.

T he en v iro n m e n t’s or m odel-establishing g ro u p s’ influence finds its reflection in another paradox o f con sum er behaviour th at m ay be treated as a m an ifestatio n o f econom ic irratio n ality . It is about th e e ffec t of craze and the effect o f snobbery.

Both above mentioned paradoxes may be explained only by referring to the theory o f stratification and the influence of the social structure on people’s behaviour. They occur, because a consumer acting on the market in not isolated from the world, but he exists in a defined environment to which he adapts and in a way he also changes it. So consum er behaviour shapes under the environment’s influence. Human environment divides into natural, cultural and social environments. Natural environment is defined by natural and climate conditions. Cultural environment (culture) is identified with macrogroups homogenous in national, ethnical or social respects. Cultural contribution and accepted customs and norms o f behaviour are essential here. Social environment, on the other hand, embraces people and their interactions with physical surrounding. Here the attitude of a human being towards other human beings and material things counts, and it is considered most often in structural system. Nearer surrounding consists of people and groups with whom a consum er maintains regular, personal contacts. It thus consists o f relatives, friends and colleagues. A family, as the nearest social environment, has a particularly strong influence on shaping consumer behaviour. Farther surrounding embraces people and social groups with whom a consumer does not contact regularly, and he rarely has an opportunity to contact it directly. Most often it is an indirect contact by means of mass-media, films, cultural or sports events etc. The influence of the farther environment is usually complex, so it is hard to identify it, for it influences indirectly, i.e. in a way which is not even realized by a consumer (Kroebel-Riel 1970). Nearer and farther environments influence a consumer non-separately and alternatively. Direct effects m ay be observed in the personal contacts with the nearer surrounding and in indirect with the farther surrounding. Common influence o f both, nearer and farther environments, on consumer behaviour can be permanent or impermanent. The effect is impermanent when the influences of the farther environment (e.g. an advertisement), become the target for negative criticism for the people from the nearer environment. In consumer behaviour the influences of the nearer surrounding are the most valid and

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30 L. SKIBA. R. MAJKUT

precious, especially those coming from people whom the consumer respects, admires i.e. honours with prestige, or (and) whose approval he seeks for himself. With his behaviour, he tries to conform to them, and simultaneously he tries to distinguish positively, thanks to which he expects to gain acceptation and approval of the members of the group o f reference. This way he satisfies his individual need for belonging and respect, assures the feeling of belonging to environmental groups that he respects and by whom he is respected. In researches on consumer behaviour this groups are concerned to be of primary importance. They are also usually the pattern-making groups of reference. Groups of reference are all those social groups who, because of their position taken in the society, their prestige, and the features of superiority ascribed to them, such as incomes, wealth, the scope of executed political or economic power, become the object of admiration, envy and imitation for other groups (Szczepański 1977).

4. CONSUMPTION PATTERNS SHAPING

C onsum er behaviour is characterized by changeableness, which finds its reflection in social patterns comm on to certain groups or social categories. “Establishing these patterns, the sam e as establishing behavioural patterns in other domains of life, consists in acquiring, in the course of socialization process, some schemes of reacting accordingly to the norms adapted by the group and in a way that is sanctioned formally or informally” (Sikorska 1979, p. 43). J Szczepański wrote that “patterns of behaviour [...] express some established and acknowledged in a given culture regularity of phenomena processes, they are established patterns which let us “read” and understand human behaviour, because we know that some particular behaviour in a given situation expresses so and so intentions and tendencies” (Szczepański 1977, p. 102). For the need of the present discussion it would be sensible and useful to complete these definitions with an element which will give behavioural patterns operational character in respect to the research on social structure, “because beside the role of the consumption level as a vertical factor of social differentiation, the patterns themselves may appear an autonomizing factor of social status, the way o f horizontal social activity, as participating in culture occurs to be. Considering the above, we may define consumption patterns as a system of hierarchically arranged aims and elicit consumption preferences and means and ways of satisfying these needs so characteristic for an individual or for the group, that it lets place them in relation to other individuals or groups” (Siciński 1976, p. 15). The problem of consum er behaviour therefore is connected to the theory of social stratification. In the opinion of many theoreticians of stratification, it is not only affluence or income level, but also education, lifestyle and professional position, that determine social position of an individual. Lifestyle and consumption

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pattern “produce” many levels of social position and lead to social stratification. In the light o f this theory satisfying individual needs and preferences plays secondary role in consum er’s choices. The main criterion is the opinion of the social group to which an individual belongs or wants to belong. The motivation for conforming to the lifestyle of a given group, to the life standard valid in this group and distinguishing through the consumption are of ultimate importance for consum er’s choices. N ot conforming to a given standard of consumption may result in isolating or even removing from the group, whereas positive distinguishing serves strengthening one’s prestige or increasing social position, i.e. it is helpful in climbing up the social ladder. Lifestyle can be understood as “the scope and form of everyday behaviour of individuals or groups, specific for their social position, i.e. manifesting their social situation and perceived as characteristic for this situation, and thanks to it allowing wide understood social localization of other people” (Sicinski 1976, p. 16).

At the basis of individuating o f consumption patterns as a group feature lies the phenom enon of conformist behaviour. A human being, aspirating to satisfy his needs that result from his social nature, participates in a group. ‘T he condition for group acceptation is adaptation and conformity towards the group’s norms and customs. This way the weight of individual choices and decisions gets diminished. An individual adapts to the rigours and submits to the pow er executed by the group over its members. This power realizes through the norm s that have shaped as a result o f interaction” (Newcomb et al. 1970, p. 241). Such conformity is concerned also in the case of consumption. W e may risk a statement, that it is most spectacular in this sphere of life particularly.

Conform ity and imitation are the factors characteristic for human psycho-social structure, which indirectly benefit to the inner consistence o f the group. In this sense they strengthen inter-group differentiation in the sphere o f consum er behaviour. The factor loosening the inner group similarity of behaviour are non-conformist acts. Appearing in a certain mass they may cause that the consumption patterns being characteristic for the group which allows situating it in relation to other groups, begins to vanish” (Sikorska 1979, p. 44).

5. C O N C L U S IO N S

At the end of our discussion it is worth reminding that while searching for some theory o f economic development we have to consider many social and psychological factors conditioning long-term changes of the system, i.e. its development. In the present paper we were trying, on the basis of sociological and psychological aspects of the market, show the com plex problems of social conditioning of the economic phenomena and processes. It seems that such an

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interdisciplinary approach to the questions of economy can bring up something new and valuable to this science.

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